Correlation Between Euro Tech and Greenlane Renewables
Can any of the company-specific risk be diversified away by investing in both Euro Tech and Greenlane Renewables at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Euro Tech and Greenlane Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euro Tech Holdings and Greenlane Renewables, you can compare the effects of market volatilities on Euro Tech and Greenlane Renewables and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Euro Tech with a short position of Greenlane Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euro Tech and Greenlane Renewables.
Diversification Opportunities for Euro Tech and Greenlane Renewables
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Euro and Greenlane is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Euro Tech Holdings and Greenlane Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlane Renewables and Euro Tech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Euro Tech Holdings are associated (or correlated) with Greenlane Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlane Renewables has no effect on the direction of Euro Tech i.e., Euro Tech and Greenlane Renewables go up and down completely randomly.
Pair Corralation between Euro Tech and Greenlane Renewables
Given the investment horizon of 90 days Euro Tech Holdings is expected to generate 0.53 times more return on investment than Greenlane Renewables. However, Euro Tech Holdings is 1.9 times less risky than Greenlane Renewables. It trades about 0.01 of its potential returns per unit of risk. Greenlane Renewables is currently generating about -0.03 per unit of risk. If you would invest 134.00 in Euro Tech Holdings on November 1, 2024 and sell it today you would lose (4.00) from holding Euro Tech Holdings or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Euro Tech Holdings vs. Greenlane Renewables
Performance |
| Timeline |
| Euro Tech Holdings |
| Greenlane Renewables |
Euro Tech and Greenlane Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euro Tech and Greenlane Renewables
The main advantage of trading using opposite Euro Tech and Greenlane Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euro Tech position performs unexpectedly, Greenlane Renewables can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Greenlane Renewables will offset losses from the drop in Greenlane Renewables' long position.| Euro Tech vs. LiqTech International | Euro Tech vs. TOMI Environmental Solutions | Euro Tech vs. ClearSign Combustion | Euro Tech vs. Vow ASA |
| Greenlane Renewables vs. Euro Tech Holdings | Greenlane Renewables vs. China Natural Resources | Greenlane Renewables vs. Fuel Tech | Greenlane Renewables vs. Vow ASA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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